ByIslamabad, Pakistan: The Federal Board of Revenue (FBR) should prioritize the integration of tax departments to improve efficiency, reduce costs, and enhance transparency.
Integration can lead to economies of scale, eliminate duplicate functions, and establish better data-sharing mechanisms. Despite the evident benefits, Pakistan has been slow to adopt this approach, particularly at the provincial level.
Balochistan, heavily reliant on the Federal government for revenue, faces challenges due to the fragmented nature of its tax administration. Multiple entities, including the Board of Revenue, Excise, Taxation and Anti-Narcotics Department, Balochistan Revenue Authority, Energy Department, and Transport Department, handle revenue collection in the province.
Consolidating these entities can streamline processes, improve data management, and enhance revenue collection. Examples from other countries, such as India and Bangladesh, demonstrate the successful implementation of integrated tax systems. Dawn
India’s Goods and Services Tax (GST) reform and Bangladesh’s efforts to integrate customs, value-added tax, and income tax departments are notable examples of successful tax integration.
In Pakistan, the Khyber Pakhtunkhwa provincial government has already agreed to merge the Excise and Taxation Department with the KP Revenue Authority. This step is a positive move towards greater integration.
However, there is still significant potential for further integration, particularly in Balochistan. The province should focus on consolidating its revenue-generating bodies and implementing a unified tax system.
By integrating tax departments, Pakistan can improve its tax administration, reduce compliance costs, and enhance revenue collection. This will ultimately contribute to sustainable development and economic growth.
